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Bankruptcy Residency Requirements

Bankruptcy Lawyer Bryan W. Stone answers the question: “What are my alternatives to bankruptcy?”


There are many considerations that go into filing for bankruptcy. As we’ve discussed many times before, you have to be sure that bankruptcy is right for you and, even if it is, that this is the right time to move forward. Something you may not think much about is how residency can impact your ability to file for bankruptcy. To learn more about where the law allows you to file for bankruptcy, keep reading.


Calendar Charlotte Bankruptcy Law FirmWhat the law says about filing


The first thing to note is that when it’s time to file your bankruptcy case you’ll need to do so before a U.S. Bankruptcy Court. There are dozens of federal judicial districts spread across the country and knowing exactly which one applies to your case can be confusing. The law says that you must file in a court located either where you have lived or maintained residency for the 180 days prior to filing or where your principal place of business or assets are located in the 180 days before filing.


What if you moved?


Things get a bit more complicated if you’ve recently relocated. Though you might assume the law requires you to file wherever you’re residing at the moment, you’d be wrong. In fact, the law says that you must file where you lived or maintained residency for the greater portion of the 180 days prior to filing. For example, if you’ve spent years living in South Carolina, but relocate to North Carolina a month before filing, you should file for bankruptcy back in South Carolina.


What about your assets?


If your assets are primarily located in another state, that is also something worth keeping in mind. For instance, if you’ve temporarily relocated for work and your property is located back home, you might still be able to file there rather than in your new location. The same can happen if you are filing for bankruptcy with an estranged spouse. Even if you relocated, if your primary assets remain with the estranged spouse, the bankruptcy would still be proper filing in your former location.


What if you file in the wrong locations?


The good news is that if you file in the wrong place it isn’t the end of the world. Though the judge will likely hold a hearing to learn more information, there’s a chance that he or she may decide to keep the case in the area. If, however, the judge determines that your creditors would be disadvantaged by having the bankruptcy proceed in the new location, or if it would be easier from a practical perspective for the bankruptcy to occur elsewhere, it’s possible your case could be either transferred or dismissed.


What about exemptions?


Unfortunately, things get even trickier when it comes to bankruptcy exemptions, so let’s walk through that quickly. Before you can use a state’s bankruptcy exemptions, you must have been continuously domiciled there for two years (730 days) prior to filing. If that isn’t true for you, then you’ll need to use the 180-day rule to determine which state’s exemptions apply to your case.


Under the 180-day rule, you must look at where you were domiciled for the longer portion of the 180 days prior to the two years before your bankruptcy filing date. That means you’ll need to look back 2.5 years before filing to see which state’s laws apply.


If you are contemplating bankruptcy in the Charlotte area, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with legally sound advice for your particular situation.


About the Author

Kyle Frost Bankruptcy Lawyer Student loan attorneyKyle Frost joined Arnold & Smith, PLLC in 2013 where he focuses his practice on all aspects of civil litigation and bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

Born and raised in upstate New York, Mr. Frost attended the University at Albany on a Presidential Scholarship, graduating magna cum laude with a double major in Political Science and Sociology.  He went on to attended Wake Forest University School of Law in Winston Salem, North Carolina.

Following college, Mr. Frost spent over a year teaching English in South Korea. He worked in a private school in Seoul developing curriculum, English programs, and educating both children and adults that were interested in learning a new language.

In his spare time, Mr. Frost enjoys homebrewing, fishing, and travelling.



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